President Prabowo Updates Risk-Based Business Licensing Regulations
Jakarta: The government has issued Government Regulation Number 28 of 2025 on the Implementation of Risk-Based Business Licensing (PBBR). The regulation was signed by President Prabowo Subianto on 5 June 2025 and came into effect upon its promulgation.
The regulation is a refinement of Government Regulation Number 5 of 2021 as part of the implementation of the Job Creation Law. It aims to facilitate ease of doing business through a risk-based approach, simplify licensing procedures, and enhance legal certainty for business operators.
The regulation governs a number of sectors related to PBBR as stipulated in Article 5, including maritime affairs, agriculture, energy, industry, trade, health, transport, education, tourism, the environment, defence, and the creative economy.
All licensing under PP 28/2025 is processed through the Online Single Submission (OSS) system, including data integration from ministries, agencies and regional governments. The OSS manages the workflow from fulfilment of basic requirements and submission through to the issuance of permits, either automatically or manually as appropriate.
The regulation also classifies businesses according to risk level: low, medium-low, medium-high, and high. For low-risk micro enterprises, a self-declaration through the OSS system is sufficient. For high-risk businesses, licensing requirements and oversight become increasingly complex.
The implementation of PBBR is carried out by the central government, regional governments, and special bodies such as Special Economic Zone (KEK) Administrators and Free Trade Zone and Free Port (KPBPB) authorities. Each has licensing authority within its respective jurisdiction.
Tax Facilities
In addition, PP 28/2025 also regulates tax facilities that may be applied for by business operators, as set out in Article 235. These tax facilities include: first, exemption from import duties on machinery, goods and materials for industrial development or expansion in the context of capital investment; second, exemption from import duties on capital goods for public electricity generation; third, exemption from or reduction in import duties on goods imported under contracts of work or coal mining exploitation agreements.
Fourth, corporate income tax reductions. Fifth, income tax facilities for capital investment in specific sectors and/or regions. Sixth, gross income deductions for work placements, apprenticeships and training programmes.
Seventh, gross income deductions for specific research and development activities in Indonesia. Eighth, net income deductions for new capital investment or business expansion in labour-intensive industries.
The regulation is a refinement of Government Regulation Number 5 of 2021 as part of the implementation of the Job Creation Law. It aims to facilitate ease of doing business through a risk-based approach, simplify licensing procedures, and enhance legal certainty for business operators.
The regulation governs a number of sectors related to PBBR as stipulated in Article 5, including maritime affairs, agriculture, energy, industry, trade, health, transport, education, tourism, the environment, defence, and the creative economy.
All licensing under PP 28/2025 is processed through the Online Single Submission (OSS) system, including data integration from ministries, agencies and regional governments. The OSS manages the workflow from fulfilment of basic requirements and submission through to the issuance of permits, either automatically or manually as appropriate.
The regulation also classifies businesses according to risk level: low, medium-low, medium-high, and high. For low-risk micro enterprises, a self-declaration through the OSS system is sufficient. For high-risk businesses, licensing requirements and oversight become increasingly complex.
The implementation of PBBR is carried out by the central government, regional governments, and special bodies such as Special Economic Zone (KEK) Administrators and Free Trade Zone and Free Port (KPBPB) authorities. Each has licensing authority within its respective jurisdiction.
Tax Facilities
In addition, PP 28/2025 also regulates tax facilities that may be applied for by business operators, as set out in Article 235. These tax facilities include: first, exemption from import duties on machinery, goods and materials for industrial development or expansion in the context of capital investment; second, exemption from import duties on capital goods for public electricity generation; third, exemption from or reduction in import duties on goods imported under contracts of work or coal mining exploitation agreements.
Fourth, corporate income tax reductions. Fifth, income tax facilities for capital investment in specific sectors and/or regions. Sixth, gross income deductions for work placements, apprenticeships and training programmes.
Seventh, gross income deductions for specific research and development activities in Indonesia. Eighth, net income deductions for new capital investment or business expansion in labour-intensive industries.